An in-depth study demonstrates that approximately sixty percent of African-focused investment vehicles are domiciled outside the continent, inhibiting the flow of capital into local priorities and enterprises, including those run by women and youth.
The study seeks to shift this trend and position African jurisdictions as credible, strategic centers for both local and global capital mobilization that will contribute to economic growth, job creation and inclusive business opportunities for young people on the continent. Micro, small and medium-sized enterprises (MSMEs) are often too large to access microfinancing and too small to access traditional bank services, Private Equity or Venture Capital funding. MSMEs require more innovative and diverse capital providers and IVs to support their establishment and growth, building investor confidence, and alignment with global best practices.
"It is time to enhance Africa's competitiveness and increase capital mobilization through strategic investment vehicle domiciliation," says Dr. Dorothy Nyambi, President and CEO of Mennonite Economic Development Associates (MEDA), a partner in the study. "Transforming the investment landscape for African-owned and women-led investment vehicles will strengthen MSMEs that generate dignified and sustainable jobs for women and youth across Africa."
The 190-page report entitled Study on Africa as a Jurisdiction for Domiciliation of Investment Vehicles provides detailed analysis of barriers and opportunities. It interrogates why and how investors choose IV domiciliation jurisdictions and examines what steps Africa needs to make to become a preferred IV destination. The study engaged over 170 stakeholders, including fund managers, investors, regulators, ecosystem enablers, and investment professionals from African and global fund domiciliation centers.
"Africa's youth face significant barriers to decent work," says Maame Tutua Dadson, Lead Counsel, Stafford Law, and a contributor to the study. "MSMEs are effective at producing inclusive jobs but have limited access to affordable finance. That is hindering African entrepreneurs from starting, growing and scaling high-potential enterprises."
The release of the full study is part of a three-year initiative, led by MEDA, to apply key learnings from the Mastercard Africa Growth Fund's efforts to catalyze risk capital. Over the next year, the initiative will engage the growing African investment ecosystem in changing regulations and policies to support the expansion of domiciliation in Rwanda, Ethiopia, Ghana, Kenya, Nigeria and West Africa Economic and Monetary Union (WAEMU) countries including Senegal and Côte d'Ivoire. In parallel, the African Crowdfunding Association will work to change regulations around crowdfunding that further expand policy options for African IVs.
"Our collaborative team will be engaging directly with decision-makers to find ways to enhance their regulatory and policy environments to be more welcoming to African domiciles that strengthen the capacity of IVs to deploy more capital and expand access to funding for women-led enterprises," said Diana Smallridge, CEO of Momentus Global and a contributor to the study.
The release of the study was part of a pan-African webinar co-hosted by the Collaborative for Fund Domiciliation in Africa, MEDA and the Africa Impact Investing Group, with network partners African Venture Capital Association (AVCA) and the African Venture Philanthropy Alliance (AVPA).
About the Africa as a Jurisdiction for Domiciliation of Investment Vehicles Report:
The report entitled Study on Africa as a Jurisdiction for Domiciliation of Investment Vehicles was commissioned by the Mastercard Foundation and conducted by a team of experts from across Africa and the globe, including Momentus Global, Samawati Capital Partners, and Stafford Law, with support from Mennonite Economic Development Associates (MEDA) and in partnership with Mastercard Foundation. The Full Report provides detailed insights and country-level analyses for Cabo Verde, Côte d'Ivoire, Ethiopia, Ghana, Kenya, Mauritius, Morocco, Nigeria, Rwanda, Senegal, South Africa, Togo and Uganda.
For more information or media interviews, please contact:
Aida Diop
Email: adiop@meda.org
For more information about the technical aspects of the study, please contact:
Jyoti Maheshwari
Email: jmaheshwari@momentus.global